Sunday 6 July 2014 11:33 pm

Customer science: Dunnhumby CEO Simon Hay on the importance of data in online advertising

Liam Ward-Proud talks to Dunnhumby chief executive Simon Hay.
Before media agencies started making serious strides into consumer data and personalisation, customer insight firm Dunnhumby was busy helping Tesco (now its owner) reinvent the customer loyalty programme with Clubcard. Now, after buying German ad tech firm Sociomantic Labs this April, it’s planning on using this data-centric approach to disrupt the way online advertising is planned and personalised. Chief executive Simon Hay talks to City A.M. about the importance of data, and how his firm is stepping on the toes of both media agencies and management consultancies.
Dunnhumby is best known for its work with Tesco Clubcard. Tell us about the move into online advertising.
We’re in the business of trying to create the best experience for the customer, and our data and expertise are applicable in more areas than we currently work in. What’s happening now in the world of programmatic and addressable media allows us to take what we’ve been doing for years in more traditional channels and deploy it in real time. Whereas in the past, we’d have sent a targeted coupon through the mail, we can now deliver a targeted message with the same degree of relevance and accuracy through digital channels. 
Should the media agencies be worried?
In the past, companies like us, media agencies, and management consultancies all brought different skills to the table – creativity, data, and processes. The reality now is that data is ubiquitous. But what differentiates us all is what we do with the data. Media agencies are still going to be focused on creating the best plans for their clients, the strategic consultancies are typically looking to activate a business plan, and we’re looking to activate communications across a range of channels to earn the loyalty of shoppers. We’re seeing some convergence, but not complete convergence.
As a data-focused company, have you got any advice on how firms should use data in the coming years? 
Most companies would admit that they are still getting to grips with big data. But it’s unavoidable – certainly in marketing, where, because of programmatic, there isn’t a way to activate campaigns without being on a real-time platform. There are a few questions that organisations need to ask: where will decisions be made by machines as opposed to humans? How do we make the decision-making process simpler and faster?
How does the relationship with Tesco work? Are there conflicts of interest when you work with other retailers?
I think being part of Tesco brings many more benefits than challenges. It’s a fantastic client for us – opening doors, and acting as a case study when we take services to the rest of the world. It’s a global market – we run data in 60 countries. Tesco is dominant in the UK, and it’s in 12 countries in total, giving us 183 more countries in which we’ve got space to work with other retailers. 
What’s next for Dunnhumby? Any more acquisitions in the pipeline?
We’re always restless about what we do, and it starts with the question: “What’s the best set of value-creating services that we can build?” Programmatic was such an apparent trend, but we’re always looking at any new themes or forces in the industry. Mathematics is an interesting area. We made some acquisitions last year around machine learning and advanced forecasting. Given that analytics is at our heart, when we see new techniques and ways of processing data, we’re always interested in acquiring in that space.